Costco Auto Insurance: An In-depth Look Like Never Before

Costco Auto Insurance: An In-depth Look Like Never Before

For some of us, buying insurance might be intimidating, but it shouldn’t be. It shouldn’t be difficult, cause headaches, or be a nuisance. When insurance agents and consumers collaborate, they all have the same aim in mind: to keep you safe. In its most basic form, insurance entails you, the consumer, paying a corporation a monthly charge in exchange for protection against financial loss. Insurance policies are available for a wide range of hazards, but the most typical are auto, home, life, health, and business. By minimizing the chance of financial loss as a result of an accident, insurance can help to alleviate the uncertainties of daily living.

Finally, by purchasing an insurance policy, you will not be responsible for huge payments if the unexpected occurs, such as auto accidents, health issues, natural catastrophes, and so on. Because there are so many different types of insurance and insurers to choose from, selecting an agent you can trust is crucial.

There are many different types of insurance policies to choose from, and almost anyone or any business can find an insurance company eager to insure them—for a fee. Auto, health, homeowners, and life insurance are the most frequent types of personal insurance plans. Car insurance is required by law in the United States, and most people have at least one of these types of insurance. Insurance is a contract in which an individual or entity receives financial protection or compensation from an insurance firm in the form of a policy. The firm pooled the risks of its clients to make payments more reasonable to the insured.

Car, truck, motorcycle, and other road vehicles are all covered by auto insurance. Its major purpose is to provide financial protection against physical damage or bodily injury caused by traffic collisions, as well as the responsibility that may arise as a result of such incidents. Vehicle insurance may also provide financial protection against vehicle theft and damage caused by incidents other than traffic crashes, such as keying, bad weather, or natural catastrophes, as well as damage caused by colliding with stationary objects. Each region’s legal rules influence the precise terms of vehicle insurance.

Costco is a warehouse-based membership club that sells products and services both online and in its warehouses. Costco’s partnerships also provide members with exclusive discounts, pricing, and benefits. Costco auto insurance through CONNECT (previously Ameriprise Auto and Home), a division of American Family Insurance, is one of these perks.

Table of Contents

What is insurance?

Insurance is a smart approach to transfer these risks to a third party. The insurance firm (insurer) and the individual enter into a legal agreement known as insurance (insured). In this case, the insurance company guarantees to compensate the insured for any losses incurred as a result of the covered contingency occurring. The contingency is the occurrence that results in a loss. It might be the policyholder’s death or the property being damaged or destroyed. It’s referred to as a contingency because the outcome of the occurrence is unclear. In exchange for the insurer’s promise, the insured pays a premium.

What is the procedure for obtaining insurance?

The insurance policy is a legal contract between the insurer and the insured for the insurance. The insurance policy specifies the rules and situations under which the insurance company will pay the insured person or nominees the insurance sum. Insurance is a means of safeguarding yourself and your loved ones from financial ruin. In general, a large insurance policy has a lower premium in terms of money paid. Because very few insured people actually claim the insurance, the insurance firm bears the risk of offering a high level of coverage for a low cost. This is why you can get insurance for a large sum of money at a low cost. Any individual or business can seek insurance from an insurance company, but the insurance company has the final say on whether or not to give coverage.

Auto insurance in the US

Car, truck, motorcycle, and other road vehicles are all covered by auto insurance. Its major purpose is to provide financial protection against physical damage or bodily injury caused by traffic collisions, as well as the responsibility that may arise as a result of such incidents. Vehicle insurance may also provide financial protection against vehicle theft and damage caused by incidents other than traffic crashes, such as keying, bad weather, or natural catastrophes, as well as damage caused by colliding with stationary objects. Each region’s legal rules influence the precise terms of vehicle insurance.

The circumstances under which each item is covered are specified in different policies. A vehicle, for example, can be insured separately against theft, fire damage, and accident damage. GAP insurance may cover the gap if a car is deemed a total loss and its market value is less than the amount still owed to the bank that financed the vehicle. GAP insurance is not included in all auto insurance coverage. The credit company will frequently offer GAP insurance when the vehicle is purchased.

Excess payment

An excess payment, also known as a deductible, is a one-time payment that must be made each time an automobile is repaired and expenditures are invoiced to an auto insurance policy. When the owner picks up the car, the payment is usually given directly to the accident repair “garage” (the term “garage” refers to an establishment where vehicles are serviced and repaired). If a vehicle is ruled a “write-off” (or “totaled”), the insurance company will take the agreed-upon excess from the settlement money made to the owner.

If the collision was caused by the other driver’s negligence, and the third party’s insurer accepts this liability, the car owner may be able to recoup the excess payment from the other driver’s insurance company. An automobile excess insurance coverage can also safeguard the excess itself.

What is Costco?

Costco is a warehouse-based membership club that sells products and services both online and in its warehouses. Costco’s partnerships also provide members with exclusive discounts, pricing, and benefits. Costco auto insurance through CONNECT (previously Ameriprise Auto and Home), a division of American Family Insurance, is one of these perks.

In 1927, American Family Insurance was established in Madison, Wisconsin. Since then, it has developed into a Fortune 500 corporation with total assets of $34 billion and customer equity of $10.6 billion. Costco auto insurance has been available to members for nearly 20 years. Vehicle, property, business, and life insurance are among the plans offered by American Family Insurance.

Pros and cons of Costco

Advantages of Costco

Multiple coverage discounts – Customers can receive discounts from Costco auto insurance based on their loyalty, excellent driving habits, education, and vehicle safety features.

Extra perks for Costco Executive members – Costco Executive members are entitled to additional benefits at no additional cost. Glass repair reimbursement, home lockout help, and roadside assistance are among the benefits.

Customers can choose their own body shop to finish repairs after an accident. Customers are not obligated to use a body shop from the insurance company’s list.

Drawbacks of Costco

Costco auto insurance received four times as many complaints as the industry average, according to the National Association of Insurance Commissioners (NAIC).

Car insurance through a third party — CONNECT, a branch of American Family Insurance, provides Costco auto insurance. When dealing with a third party, you cannot expect the same level of service that Costco provides. Customer service hours are limited — live representatives are not available 24 hours a day, 7 days a week. You must call between 5 a.m. and 8 p.m. PT Monday through Friday or 6:30 a.m. and 5 p.m. PT on Saturday to speak with one. On Sundays, the phone center is closed.

Auto insurance coverage at Costco

The following types of coverage are available with Costco auto insurance:

Coverage for liability

The following items are covered under liability insurance:

Bodily injury insurance

This covers claims if you are determined to be at fault in an auto accident and damage someone.

Property damage insurance

This protects you against damage to another car or property caused by your vehicle. Damage to your own car is not covered.

Medical insurance

The following services are covered by medical insurance:

Medical expense insurance

This covers any essential medical bills incurred as a result of an automobile accident, regardless of who is to blame. In the event of an accident, the driver, their spouse, family living in the household, and anyone occupying a vehicle on your insurance is protected.

Personal Injury Protection (PIP) insurance

PIP insurance protects you, your family, your passengers, and pedestrians who are hurt or killed in a car accident.

Coverage for uninsured and underinsured motorists

Uninsured and underinsured motorist coverage protects you and your car in the event that you are involved in an accident that is not your fault and the other driver either does not have insurance or does not have enough coverage to cover the full extent of the damage. According to a survey conducted by the Insurance Research Council in 2021, one out of every eight drivers does not have insurance, so getting it may be a good idea.

Coverage for vehicles

Vehicle coverage is divided into two parts:

Collision

Whether or not it was your fault, your car is insured for damage caused by a collision with another vehicle or object. Break-ins, animal strikes, and natural calamities are examples of damage to your vehicle that you have no control over. You can lower your annual premiums by raising the deductibles on your insurance plan.

Additional protection

Optional coverages for your vehicle are also available through Costco auto insurance:

Accident travel expense policy

If you’re in an accident more than 100 miles from home and your automobile is inoperable, this coverage covers your out-of-pocket travel and lodging fees.

Gap insurance

In the event of a loss, gap insurance, also known as “guaranteed auto protection,” pays the difference between the value of your vehicle and the amount of your initial loan. This coverage covers up to 120 percent of the value of your vehicle. It covers new automobile replacements for the first year, followed by gap coverage for the next two years.

Glass repair deductible waiver

This policy is included at no additional cost with all auto insurance policies and covers windshield repairs without a deductible. Windshield replacement, on the other hand, is not covered.

New car replacement coverage

If your vehicle is a total loss during the first year of ownership (or the first 15,000 miles), you can replace it with the same make and model for up to 110 percent of the manufacturer’s suggested retail price.

Rental car insurance

It covers the cost of daily rentals if you need to rent a car after an accident. The level of coverage is limited to the amount you specify.

Roadside assistance and towing

This covers the cost of towing your vehicle to a repair shop, as well as labor charges if your vehicle is disabled. This work entails changing a flat tire, replacing a dead battery, and removing your automobile from a snowdrift.

Stolen key coverage

Comprehensive insurance policyholders are automatically covered for stolen keys. If your key is stolen, this benefit replaces the locks on your vehicle. If the cost is less than $250, there is no deductible to pay.

Factors that influence your insurance premiums

The cost of insurance is determined by a variety of criteria, and not all firms treat them equally. They are as follows:

Age

Mature drivers are less likely to be involved in accidents, thus they pay less for auto insurance. Teenagers and drivers under the age of 25 are more likely to be charged higher charges.

Gender

Because women have fewer accidents and DUIs than men and the ones they do have are less serious, their insurance costs are lower.

Car use

Your charges are determined by how many miles you drive and what you use your car for—leisure, commuting, or work. The more you drive, the more likely you are to get into an accident. Drivers who only drive once in a while pay the least.

Location

Due to the increased risk of accidents, break-ins, and other damage, urban drivers pay more than suburban and rural drivers.

Vehicle

Insurance prices are heavily influenced by the cost of your vehicle. Your prices are also influenced by the likelihood of theft, the cost of repairs, the engine size, and your overall safety record.

Auto insurance discounts at Costco

Costco auto insurance customers may benefit from these reductions, which can cut their premiums.

Vehicle equipment

Anti lock brakes

When you slam on the brake pedal, this vehicle feature instantly pumps your brakes to prevent your brakes from locking, allowing you to maintain control of your vehicle.

Airbags

In the case of an accident, airbags inflate to protect the driver and passengers.

Automatic seat belts

When the vehicle is in motion, automatic seat belts are self-activated to guarantee that passengers are wearing seatbelts.

Vehicle alarms, tracking devices, and other anti-theft equipment

Vehicle alarms, tracking devices, and other anti-theft devices secure the vehicle and reduce the likelihood of it being targeted by criminals.

Driving experience and habits

Garaging discount

If you store your car in a garage, you may be eligible for a discount because it is protected when not in use.

Good driver discount

Good driving practices might help you save money on your insurance costs. Only California residents are eligible for this discount.

Premier safety discount

You’ll get a discount on your insurance if all of your insured drivers have had clean driving records for the last four years.

Education for drivers

Defensive driver discount

If you complete a refresher driving course through your state’s Department of Motor Vehicles (DMV) or another recognized organization, you will receive a discount on your insurance premium.

Education discount

Students who have completed at least four years of postsecondary study may be eligible for a discount.

Good student discount

Full-time students who maintain strong academic accomplishments are eligible for a discount.

Student away discount

Students who attend school more than 100 miles away from home and do not drive a vehicle on a regular basis may be eligible for a discount. If the student has a car at school, this discount does not apply.

Customer satisfaction

Auto and home bundle

Customers who combine their house or condo insurance with their Costco auto insurance save money on their policies.

Auto and umbrella bundle

You’ll get a discount on your car insurance if you get an umbrella policy.

Auto, Home, and Umbrella – When you buy all three policies from Costco auto insurance, you’ll save even more money.

Multiple vehicle discount

You may be eligible for a discount if you insure more than one automobile on the same policy.

Tenure discount

Customers who meet certain time-related milestones will earn a discount on their insurance contracts.

Availability of auto insurance at Costco

CONNECT, a division of American Family Insurance, offers Costco auto insurance. You can buy insurance directly from CONNECT, but some Costco members may not be eligible for savings or group pricing. State-by-state differences in coverage limitations, discounts, and payment alternatives exist.

In some states, insurance coverage is not accessible. Costco Insurance Agency is not licensed in the state of New York, so residents of that state are unable to purchase insurance from Costco. Furthermore, residents of Tennessee are not eligible for Costco discounts, and residents of Massachusetts must be Costco Executive members in order to obtain savings.

Customer service at Costco

Costco auto insurance provides phone, email, and mail customer support. From 5 a.m. to 8 p.m. PT, customer care representatives are available. Monday through Friday from 6:30 a.m. to 5 p.m. PT, and Saturday from 6:30 a.m. to 5 p.m. PT. On Sundays, customer support is unavailable.

Many customer service needs, such as adding or removing drivers or vehicles, changing your residence, and upgrading your education level, can be accomplished online using the CONNECT website. CONNECT also offers “quick services,” which handle the most basic activities without requiring you to enter into your accounts, such as updating payment information or receiving a copy of your policy or vehicle ID card.

The parent firm of CONNECT, American Family Insurance, is well-known in the insurance market. AM Best, an insurance credit rating organization, gave American Family Insurance an A (Excellent) Financial Strength Rating, the third-best out of 13 available. The Financial Strength Rating of AM Best assesses the company’s financial strength and capacity to meet its financial obligations to policyholders. It is possible to trust a company with a good rating to pay claims on its insurance.

With an 862 out of 1,000 scores in J.D. Power’s 2020 U.S. Auto Claims Satisfaction Study, American Family Insurance was rated “about average.”

Index of complaints

The National Association of Insurance Commissioners (NAIC) keeps track of all complaints filed against insurance companies in its database. The NAIC produces ratios that compare a company’s complaint rate to its premium rate.

A score of 1.0 is assigned to the average insurance firm. A number of more than 1.0 indicates that the company receives more complaints than the norm, while a value of less than 1.0 suggests the opposite. A score of 2.0 indicates that the company has twice as many complaints as the market expects. The complaint ratio for American Family Insurance CONNECT in 2020 was 6.40, which was higher than the previous year’s score of 4.01.

How to file a Costco auto insurance claim

Call 888-404-5365 to file a claim on your Costco auto insurance policy 24 hours a day, seven days a week. Online reporting is also possible for some types of losses. You will be prompted to answer the following questions in order to report a claim:

  • What’s your full name, address, and insurance policy number?
  • Who was involved in this?
  • What went wrong?
  • When did it take place?
  • What exactly was harmed?
  • Were any people hurt?

Within one business day after submitting your information, you will be assigned a claims adjuster. This person will verify your insurance coverage, deductible, and loss details. Before and after images, a police record (if one was made), and medical authorization forms may be requested by the adjuster.

You can choose your own body shop to fix your vehicle, or Costco auto insurance may be able to assist you with finding one if necessary. As soon as your motor insurance claim is processed, the repairs will begin.

Cancellation policy at Costco auto insurance

Follow these procedures to cancel your policy:

  • During business hours, call 888-404-5365 to reach customer care.
  • To service existing insurance, dial 1 when requested by the automated system.
  • Prepare to give the phone representative your auto insurance policy number.

Get an auto insurance quote from Costco

Costco auto insurance quotes can be obtained by calling 855-531-9253 or requesting one online at the Costco website. Tennessee, for example, does not accept online quotations and instead requires you to contact and chat with a real agent. Online quotes are popular because you can easily modify coverages and deductibles to see how they affect premiums.

To receive your quote, be prepared to supply the following information:

  • Name\sAddress
  • Vehicle identification number, make, and model (VIN) (The automobile may populate itself depending on public records)
  • Amounts of insurance coverage and deductibles
  • Discounts on vehicles (airbags and anti-theft devices)
  • Where do you park your car?
  • Use of a vehicle
  • Days driven for work or regular travel per week Miles driven one way to work or usual travel
  • Additional drivers or vehicles are required.
  • Email address and date of birth
  • Gender
  • Age at which the license was initially issued in the United States
  • Which car do you use the most?
  • Relationship status
  • In the last six years, there have been a lot of accidents, lawsuits, and violations.
  • Your current auto insurance company
  • Regardless of whether you own or rent your home,
  • Whether you have or plan to have a homeowner’s, condo, or renter’s policy with CONNECT, we can help.
  • What brought you to Costco auto insurance?
  • Number of the reference (optional)
  • Whether or not you have an active Ameriprise Financial account
  • The new auto insurance coverage will go into effect on this day

Other automobile insurance reviews

Although members of Costco may be eligible for savings and advantages from CONNECT, an American Family Insurance firm, these companies are independent of Costco and may not provide the same quality of service. Obtain estimates from various automobile insurance providers before purchasing a policy to discover the correct coverage for your scenario at a price that suits your budget.

Conclusion

The Costco auto insurance program offers additional benefits and discounts to Costco customers. More than 400,000 Costco members have switched to CONNECT for home and vehicle insurance. In addition, nearly nine out of ten Costco members renew their policies, indicating a high level of satisfaction among policyholders.

You may acquire a quotation and buy your coverage over the phone or online. Limited customer service hours, on the other hand, may frustrate some customers once your policy is in place. Costco members have a range of coverage alternatives to satisfy all of their insurance needs thanks to CONNECT and its parent firm, American Family Insurance. Costco auto insurance is an appealing alternative for its customers because it is partnered with a financially sound insurance firm to provide exclusive member perks.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.